Real Price Of Metals (Industrial)

I am not quite sure what you are asking? I deal with a lot of copper and brass as a well pump guy

However I would like to add, as for materials, we don't pay by weight. We pay by product. And products have become more cheaply made. They know when they have you by the nuts as well.

The other day, I needed 2 pieces of steel. One was 6", one was 5". Both same length, 4'. 5" steel was almost double what the 6" steel was, why? Because 5" is an odd size, when you need it, you pay for it. Less material = more money.

Now, say your buying copper fittings. Well, say a 1" fitting runs $15, 1 1/4" runs $20, 1 1/2" runs $25, 2" runs $30.
Well, say now you need that same copper fitting, but in 3". Well, remember that $30 2" fitting? Well that in 3" is now about $140. Why? Because thats now considered industrial size and if you need it, you better believe your getting charged for it.


NOW.. stuff like brand name faucets. They carry those in stores like home depot, lowes. Well, turns out, these are cheaper made. Sure, its a bit cheaper, they look identical. Well, you order two delta faucets, same model, one from home depot, one from a supply house. Take them both out of the box, weigh them. The one from the supply house will (should) weight more.

Even fittings now from years ago.. Such a difference. I found an old tool box of my fathers old plumbing fittings probably from the late 80s. Such a visible difference in the gauge, thickness, color, weight of the fittings its really unbelievable. They claim everything is much better made now, but in reality, its not even close.

We still pull out well pumps from the 60's made of solid brass, still working. The new pumps today have a 5yr warranty (best you'll ever get) and you'd be fortunate to get 10yrs out of one.

Companies realized, why should we sell you one, when we can sell you 10?

Everything is made to be disposable nowadays. Wow I really sound like the old man in this rant..

I want to make this clear: If you work with base metals or noble metals (PHYSICALLY HANDLING THEM) please insert a useful comment. Don't be condescending, be real. I'm looking for worksite factors that affect the rough materials.

Buyers for large companies are not the only factor in the price of metals because you also have price thresholds when you should look for alternatives. An example of that would be in the recent use of palladium in jewellery because of the astounding price of platinum. Due to traditions, jewelers rarely seek out alternatives due to a stubborn nature of doing things the old way, but this is slowly changing.

What I'm asking is the history of prices based on their actual use, not investments or other trickeries. I suppose I'm also wondering about the sustainability of prices based on their industry. With jewellery, you have to mark up all your materials, stones, then add your labor (many ways of doing it). For example, solder will usually run you double the spot price because it is alloyed, rolled flat, cut up, and sold by the pennyweight (mostly). So your skill in using less solder makes you spend less time on the job and makes for a cleaner solder joint. Your skill allows you to make more money because of your speed and accuracy. So after a certain point, the premiums on metals will just be too expensive so alternatives (in material and process) are sought out. Sheet, wire, tubing, all have markups when you purchase them, so if you're not skilled you're going bankrupt (broken bench). An example of a speedier process would be deep-draw die forming versus repousse: sinking and raising (hitting the silver with various shaped hammers on stakes and anvils). With dies you get consistent results and a faster production rate.

@Jenger: My dad says that copper pipes will all one day be made of "plastic", based on his conversations with construction workers, but I don't know how reliable that is. Even cars are mostly plastic now, BUT there is more silver used today due to more electronics used in cars. Is there any truth to this?

@denco7: I thought steel was very affordable? I would think that nails are mass-produced, so that's odd. You're saying that the premiums charged by companies like yours are left the same as your materials lower in cost? Just in case?

And I'm saying it's not as simple as armchair trading. There's more at work and if you have any meaningful insight I'd like to read it. The triggers for supply and demand are not as easy as looking at lines and numbers. A chart cannot tell you the evolving uses of different metals and alloys.

@yup: Can you reread my request and digest it, please? I would value your input if you actually worked with metals and had any knowledge of their industrial uses beyond making a profit. That's what I'm getting at. At the risk of sounding rude, you can comment in your own thread regarding your spin/angle, ie. looking at charts from proxies and price actions, trends, or whatnot - I'm not interested in that, not even slightly.

******I'm trying to set up a new look at metals here without falling back on charts or speculation. This is something from which we can all learn IF we connect our ideas. It's a give and take learning experience. I hate repeating myself so just read what's already written. I want to learn the true justifications of the prices when compared to their industrial uses. :) Let's pool our brains together.

Ah, but there are faster ways to do it, you'd have to be really low on capital to want to do it old-school like that. Plus, you get a deposit on custom work, so having your own capital isn't even necessary.

Another example I can think of is electroplating. You want that 24K yellow gold look but can only afford silver price? No problem. It's nasty, but affordable.

New alloys being created all the time can cut down on production time. Argentum silver (patented alloy) doesn't tarnish, therefore the cleanup time is faster. Turnaround time is important.

"Their industrial form cost doesn't influence the spot price if thats what youre getting at."
True, good point. I'm was illustrating the need for alternatives after a certain point (either cost or time). The fundamentals of metals aren't enough to warrant the use of one metal all the time so you're going to look for another way around the problem, which affects the market, no? If we stopped using gasoline for cars in favor of something else (cheaper or cleaner/more productive) would gas be the same price? I say no.

Not to start a silver thread here, but the applications for silver in the last decade are evolving rapidly. So with a higher demand, one would think that the price would be driven North, but the opposite effect is happening. I don't much understand why - could it be that there are more mines producing silver? I don't know; I'm not a mining expert. Investment demand is about the same as jewellery demand for silver, but the correlation isn't quite there.

Steel is not unaffordable, just like everything else though U.S. steel production is down 10% over the last 5yrs, where as China's production is up 40% . Although structural steel is still mass produced in the U.S., small items such as nails and screws are by made in Asia and the cost has been steadily on the rise. A box of stainless nails that were $50 a box 7yrs ago, are now $140 a box.
I know you didn't mean it that way , but no ...... I do not gouge my customers. I was referring to sub-contractors, which are a big part of any const. business. It is like the gas station, when the cost of crude goes up, it is reflected at the pumps the next day. When the cost of crude dips, it seems to take weeks before it is reflected at the pumps.

Copper pipes are slowly being replaced by high pressure plastic.




If you bothered to read the original post, you would see that he is asking how the price of pm's affect how we do business, not how business affects the cost of pm's

I'll add to my previous post with a few comments about the PM market. I'm not going to get into a bunch of hooey about the trend but a little background info might help.

Before PM's started their rise however many years ago we were at a point where production, or supply, was consistently slightly more than demand & prices had been stable for decades. When people became fearful about the economy there was increased demand for PM's as a "safe haven". Suddenly supply was not quite sufficient so prices went up. As prices went up more & more investors decided they wanted in, which increased prices more.

At that point ETF's were created. The idea behind an ETF is that PM's would be bought & stored with shares issued that could be easily traded. These ETF's took off & created further demand for PM's. Supply was no longer sufficient & prices inevitably went up. The more shares that were sold the more PM's were stored. That increased demand, but the key point to remember is that none of that store of metals was being used. For whatever reason investors have decided PM's are no longer a good investment. As shares of the ETF's are cashed out the metal that backs it is being sold off, which releases the stored metal creating excess supply....which convinces more people that PM's are not a good investment, which decreases demand, which..... At some point the price will either become stable, or will start another cycle.